Follow The Trend or Not

As they say, “the trend is your friend until it is not”. With that said we will set aside the meltdown risk window of 30 to 60 percent on stocks which could happen at any time

Instead we will look into some factors that will be involved in making projections for the markets in 2021.

For one thing the question of what the market thinks is going to happen in 2021 is not in question. It believes we are headed back to a normal economic environment, which if one ignores the fact that the market has already over anticipated this belief, the market believes stocks, gold, commodities, interest rates and gold, are headed higher and the price of bonds and the dollar are headed lower.

We will post our analysis and outlook for 2021 in a separate dedicated section on Thursday January 7th. At that point please go to the Home page of this website and click on:

2021 Analysis and Outlook

There you will see charts of markets and market relationships along with some analysis of them.

This analysis will include something new, a Buy and Sell Pattern tracker for stocks based around our market fracture model that triggered in January 2018.

  1. For the stock market the long term trend is obviously up but all kinds of risk adjustment analysis point to a red flag.
  2. For long term 20 year bonds, the long term trend remains up but short and intermediate trends point down as the market wants to anticipate a turn.
  3. For the dollar, like 20 yr bonds, the long term trend is up but the market wants to,

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